The AI Hype Train Continues

If you opened Google News this morning and switched to the business tab, you saw a lot of AI news. 🙄

Whether it’s a good day in the market. A bad day in the market. Or a “meh” day in the market. Artificial intelligence (AI) continues to reign supreme. Let’s review some of the top headlines from today so you’re all caught up. 👇

First up is Amazon, investing up to $4 billion in artificial intelligence firm Anthropic, a rival to OpenAI. The company was founded about two years ago by former OpenAI research executives and recently debuted its AI chatbot called Claude 2.

Amazon is looking to position itself as the one-stop shop for AI, designing its own chips for training huge AI models. Amazon Bedrock customers can also create their own generative AI applications on Amazon Cloud, and the company also sells its own AI applications. 🌥️

Its minority ownership stake creates a strategic collaboration to advance generative AI, with the startup using Amazon Web Services as its primary cloud provider. It will also use custom AWS-designed semiconductors to train its foundational models that create its AI applications. Meanwhile, AWS customers will receive early access to unique features for model customization and fine-tuning.

Next up is Wall Street going all in on Microsoft, as Guggenheim becomes the last analyst to move its sell rating on the stock up to neutral. As for the catalyst, it cited that generative AI is “too positive a force to contend with…” though it remains unclear how much monetization it will drive and when.

Roughly 90% of the analysts tracked by Bloomberg have a buy rating on Microsoft, while the rest have a hold rating. Those are some big shoes to fill for a stock that’s had a strong 2023 so far. 🔺

Meanwhile, Snapchat found a new advertising partner in Microsoft for the ads it’s using in its AI products. The “Microsoft Advertising’s Ads for Chat API” will allow Snap’s “Sponsored Links” to connect users with relevant partners related to their conversation, allowing advertisers to reach customers right as they’re showing interest in their product or service.

And lastly, Getty Images has created an AI image generator that uses only its licensed images. Through its development partnership with Nvidia, it’s hoping this product can help tackle the copyright and ownership concerns that have plagued the AI content space so far. The company was previously at the center of this controversy, suing Stability AI for using its images without permission in its image generator called “Stable Diffusion.” 🖼️

Rain or shine, AI is on the mind. We will continue to keep you updated as more news rolls in. 👍

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Peloton’s New Partnership

With Peloton’s turnaround strategy not yet bearing the fruit it had anticipated, the company continues to lean on partnerships to grow market share. For example, in September, the company entered a 5-year strategic partnership with Lulemon to bring its content to the athleisure brand’s exercise app. It also made Lululemon Peloton’s primary athletic apparel partner. 👟

It’s still too early to tell whether or not that cooperative effort is working, but management seems to think further initiatives like it will help boost revenues. As a result, it’s partnering with TikTok to bring short-form fitness videos and other content to the social media platform.

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PayPal Pops Ahead Of Key Event

It’s been a rough few years for payment giant PayPal, with shares falling 85% peak-to-trough. Recently, the stock has begun to rebound with other beaten-down tech names but remains about 80% below all-time highs. In other words, it would need to nearly 5x its share price to reach those levels again. 📈

While that may seem a ways off, investors have recently pushed shares to their best three-day run since the end of 2022. That’s because the company promised to roll out new “customer-backed innovation” at an event next Thursday, with its new CEO Alex Chriss saying, “It is very clear what we need to do.”

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Only Some EV-Makers Delivered

Electric vehicle (EV) manufacturers came out with their fourth-quarter delivery numbers today, sending their stocks all over the place. 📊

First, let’s start with everyone’s favorite, Tesla, which delivered mixed news to investors. It managed 1.81 million EV deliveries around the globe in 2023, meeting its full-year guidance and narrowly topping the consensus estimates. That was up 38% YoY but slowed from 2022. 

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Musk Threatens Tesla’s AI Ambitions

The primary bull case for Tesla is that it’s not an automobile company but a technology one. Part of the reason it’s able to command such a high valuation relative to its peers is because of that technology’s potential business impact way down the line, especially as it introduces newer developments like artificial intelligence (AI).

However, that bull case is facing an unlikely opposition…from Elon Musk himself. 🤦

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